Rosneft and ChemChina develop cooperation
Rosneft and China National Chemical Corporation (ChemChina) signed a Heads of Agreement on cooperation in equity investment in ChemChina Petrochemical Corporation (CCPC) and a Memorandum of Understanding for cooperation on the project of the Far-East Petrochemical Company (FEPCO).
The documents were signed by the Chairman of Rosneft Management Board Igor Sechin and the Chairman of ChemChina Ren Jianxin during the visit of the Russian President Vladimir Putin to Beijing and in presence of the President of People’s Republic of China Xi Jinping.
The CCPC Heads of Agreement concerns Rosneft’s planned subscription for a 30% stake in CCPC and follows the signing of a memorandum in June 2015 at the St. Petersburg International Economic Forum. The document signed in Beijing outlines the preliminarily agreed price, the transaction structure and the corporate governance issues.
The FEPCO Memorandum concerns ChemChina’s proposed acquisition of a majority stake in FEPCO project as well as the key stages of such investment. By signing the memorandum, Rosneft involves a strategic partner for FEPCO project and makes a major step towards its development.
The transactions contemplated by the CCPC Heads of Agreement and the FEPCO Memorandum are subject to due diligence and the relevant corporate and regulatory approvals.
Also, Rosneft and ChemChina signed a memorandum agreeing to supply to CCPC ESPO, Sokol, alternative crudes and other feedstocks as mutually agreed by the parties . According to the document, the parties will hold negotiations on signing a long-term contract for 4 million tons delivered within three years with an option to extend supplies and increase the contract duration. Delivery of the signed documents will enable Rosneft to significantly enhance its positions on the Asia-Pacific region energy market and China in particular. Cooperation with ChemChina will enable Rosneft to obtain a brand new opportunity to produce and market its products in each segment of the value chain through to the end consumer.
Commenting on the agreement signed, Igor Sechin said:
“The achieved agreements are indicative of a special level of cooperation with our Chinese partners. Joining efforts will further improve efficiency of our work by developing cooperation in all areas including such strategically important projects as FEPCO.”